The Climate Fix

Connecting capital to impact w/ Iulian Circo from Proof Of Impact

Episode Summary

Proof Of Impact is revolutionizing the way people fund and experience impact by connecting the people who are making a difference on the ground with the people who want to be part of the solution.

Episode Notes

In this episode recorded on 20th March 2020 I spoke with Iulien Circo one the co-founders of Proof of Impact, a venture-backed global marketplace for impact capital.

Iulien is also a human rights lawyer with a passion for social impact, he's spent all his professional life on the front-lines of aid delivery. First, as a humanitarian professional pursuing action-packed aid operations in some of the world’s most challenging environments and later as a development executive running large field operations for Global Non-Profits.

I met Iulien when he joined the community which I co-organise and I immediately knew this was someone I wanted to interview.

Iulien has spent a large part of his life doing good in this world, he knows what's broken with the system and he's working hard to fix it. I found our conversation to be authentic, heartfelt and really inspiring.


Episode Transcription

Asim: In this episode, recorded on the 20th of March 2020 I spoke with Julian Circo one of the co founders, off Proof of Impact, a venture backed global marketplace for Impact Capital. Julian is also a human rights lawyer with a passion for social impact. He spent all of his professional life on the front lines of a delivery first as a humanitarian professional, pursuing action packed aid operations in some of the world's most challenging environments and later, as a development executive running large field operations for global nonprofits. I met Julian when he drawing the ClimateAction.Tech community, which I co-organize, and I immediately knew this was someone I wanted to interview. Julian has spent a large part of his life doing good in this world. He knows what's broken with the system, and he's working hard to fix it. I found a conversation to be authentic, heartfelt on really inspiring. Let's dive straight in. Julian what's your climate fix?

Iulien: Hey Asim, great to meet you, thanks for having me, my climate solution is basically a different economic framework. I think that we need to have a common framework where it makes economic sense to have a positive impact. I think we need We need an iconic framework. Where, where? Having a positive climate. A positive time. In fact, he's profitable. That's the only way that we can win in the long term. Right? Because a lot of the typical narratives that on climate is all about personal life, that lifestyle choices, everybody says no, you have to change your lifestyle. But fundamentally small changes in lifestyle will not. On the time it will make us feel better. We will make certain changes, small changes in our community. But I think what we need is willing to challenge the economic framework where externalities are socialized, no one constant and profits are obviously privatized. And that's the only thing that matters. So the whole growth driven economic framework Mr be challenged. I believe we can't We can't win in the long term if we don't do that. So I think that the only it's not this is not the quantity of the controversial reality, even with company. But everybody agrees, or we have to do better. And I actually I'm super optimistic in terms of I'm not one of those people who promotes the idea of the cynical company. I think people are people wants to the right thing. But if I ask you a same, how can you like as a company, how do you know what your impact?

Asim: It's a great question

Iulien: if you have a company and it incorporated so hard, right? And if you're running a company, you have to focus on your core base. And if you are now toe add intact measurement and backtracking on your core business, then that's super hard, right, cause you have vertical ISAT, and I think that the best I think that the best a metaphor for this is is the early two thousands where everyone had their computer systems vertical. I remember the guy in the basement in the air conditioned room running the mail service, and and that means, you know, in those days anyone wanted to the up to date with the market had to have someone in the basement with a service, and then and then all of a sudden became easy. Now, with a credit card, you are online, you have a server, and I think we need something like that. We need basically a utility infrastructure that is easy to access that allows people to know what that externalities are. And I'm building that I'm trying to build up.

Asim: And that's what proof of impact is is doing. So what does proof of impact offer me as a as a Masoumeh business customer? First

Iulien: it offers. What we do fundamentally is we with focus on impact events on individual impact. Someone put a solar panel of their house or someone took some garbage out of the ocean or a child good vaccinating Ethiopia. And we verify that those events that actually happened and then we securitized way security. I don't You know, we are just using exponential technology to do that, but we're and we're basically second security were very fine, and secret lies in the fact that a positive event has happened. And then we're trying to build product on top of that securitize. And some of these products could be, for example, and offset your you know, if you're if you're you're a company that does a lot of flight, for example, some of our clients are It's pretty easy toe estimate your negative externalities in terms of a mission. Then a lot of our clients actually look at that. They feel quite conflicted by the fact that the only option that they have to upset that externalities trade into something that's bean traded. I mean, it's a secondary market product, but it doesn't create impact conditionality with our mother. You can actually fund specific, unique solar panels in an area of the traffic at it. Interesting or you can you can. You can basically be your own impact for polio is a company, and the end of the individual is what. And I believe that that's the way to go. I believe that you need to have transparency in the impact that has been called either positive, and I think that people should should be of the sort of impact for four years, and at the end of the day, I think regulators will require them to do that and perhaps to publish their their their impact on the balance so that negative externalities and importunate and then you draw a line and say, This is my This is my impact on the world. So basically, we're building. We're building products, investment products, financial products, donation products. On top of this off this unique event and someone who finds violences impact. You get a little portfolio, you get a dashboard because personal to you and it's built based on your own. You know the things that resonate with you, and you can see that with your money. You know, last week on Tuesday at 4 p.m. The solar panel was activated on this house in Rwanda. And because you really care about child Survivor, you can see that in a topia. These Children were vaccinated last Wednesday. You get really granular. You really granular visibility into what impact which allows us now to which allows not also build investment product coming back to my tees off, profitable, profitable, a impact you can build. And we're doing that building investment products that are that are underwritten by this unique impertinent. And I'm happy to talk about those if we can get very technical, But I'm happy to talk about,

Asim: so it sounds to me like if I'm a company and I'm looking to create an impact portfolio, I would use proof of impact. I would then decide kind of. These are the areas that I want to make sure that my company has an impact. Perhaps there's an externality in its not necessarily climate. Perhaps there's some other externality that I want to officer. Or perhaps maybe there's just something I want Teoh two DUIs Ah, as a natural beauty of my company out, Then go to proof of impact. You're then going to give me a set of raw building blocks for the kinds of impacts that I have. But you re leave it to me Is an organization to figure out how to pull all that together for me to get the overall portfolio of impact, the eye needs offset whatever else. Whatever I'm offsetting. Does that sound like uh, yes,

Iulien: yes, yes, that's you. Be honest. In practice, we do a lot off. I mean, we're helping a lot of our apartments even have people existing because impact is just not It's not a natural area of knowledge for company, you know? So so you know, we have who have them wrap their head around it and think and structure that thinking around the impact. But in principle, we want to get to the point where where you can just come to an impact marketplace like like you're going there, the indeed right, And that's basically our model. That's how they thought is designed. That's how our business model designed. The idea is that there is a demand for impact, and there there's an awful And if you match the tool directly, then you just create efficiency in terms of the way that the sources are allocated, toe are out, which is a huge change. I mean, if you if you look into the traditional incumbent way, that impact is final, the correlation between money and out it's not very clear cause, you know, money, money is going into basically a huge black box. There's all the industries that just a design to do, you know, basically take this money and find ways to implement impact. The reports are very, very hard to compare from from one of additions. If you've ever given money to charity, you probably know what I'm talking about is you just signed a check and then at the end of the year, you get the report and that's it. That's basically all you. Well, you know about that.

Asim: You give people like a dashboard you mentioned, so I can actually I can I can log in, I presume. And I can see the impact the my portfolio is having, and I can imagine that's quite

Iulien: rewarding exactly that you money has funded and no one else is funny that right? So if you get it, if you get the report from the charity at the end of the year, everybody else gets the same before. So you don't really know if I wouldn't have given money that this report be any different, You know what I mean? Where is We're approaching things, you know? That's like the top down approach charity had, you know, they had the strategy session. They said, We want to do this this year when it is much money, they went to the donor's money. Body or not, our approach is is yeah, we're on. We're going from a bottom up. These are the events that are happening, and and if this is, more of these events are happening and the overall impact will be bigger and we just make sure that people can believe in this event can get access to more capital.

Asim: Excellent. That sounds like a kind of impact that we need to have to have a really positive change in the world. What stage is proof of impact out right now? Like where you is, an organization that

Iulien: we disclosed our first. We closed our first institutional funding round last year and are really invested. It's Franklin Templeton, which is one of the world's because set manager. Well, you know, we were super lucky toe trigger the interest of some really smart investors. You know, we have some. You know, among our investors were VC shops in San Francisco, busy shops in Switzerland, financial institutions that Franklin Templeton. So we were super lucky. And I think that I think that that the fact that investors like this actually made a move pretty vested grew impact is validating a bigger thesis that I have is an entrepreneur, which is that which is that impact is becoming a necessary component of any business in a modern economy. We can talk more about that, but so wait. We close this funding round. We have a team off you know people spend it on the world. Most of our product teams in the United States on the West Coast were people in New York, in Washington, D. C. We have a product that works. We have a 40 more than 40 partners on the origination side. We can organizations that that verify their impact and make it available now on our platform. And these include large nonprofits such as CORP made because which is one of the Netherlands biggest nonprofits. Um, it includes traditional stepped off, you know, community based organization. We have a lot of social enterprises, people who try to reply to build a business that has a big social impact, particularly when you think about cooking stoves, solar panel devices, water. A lot of our apartments there are social and the private. And on the bias side, we have a number of corporate buyers. Way decided to actually focus more on corporate buyers this year. We have a During last year, we had quite a big practice with retail buyers, and I believe that there's a big market opportunity for for impact structure for the retail buyer. It's just that it's a really expensive market toe service one time. I mean, when you don't necessarily embody No way. We actually found a lot of interest from corporate, and we've decided to service corporate in north in the first place. They have a number of corporate clients that we're building. We're helping them build individuals for four years, and the platform works. So you know what happened is as a corporate, and I mean, I would be happy to do a demo that's helpful. But a corporate basically gets a custom dashboard, which is like a map, and they conceal their impact on that map. And then when they click on the impact that this is very important, they get to see all the proof. All right, so they get to see all the doctor appointed, made that event unique and very and without going into too many technical details. It's very important for our back end that we use Blockchain technology so that you know for sure that when the that that in fact is basically that argument is a broken that is unique on can only be traded one, and that's important because we want to avoid the risk that an impact event is activity to people.

Asim: I've heard of that. I've had a Blockchain at that year s secret. I I wasn't aware. That's one of the issues with kind of various offsetting programs is that they are traded again, again, Again, Again, again. But the impact only happens once. Yeah, that's that's really good to know. So

Iulien: that's a capital flowing in the wind.

Asim: So how do you How does this scale? How does this scale? Um what's the route from where you are now to kind of potentially the maximum potential impact for proof of impact?

Iulien: So it scares. I mean, every I think that every disease that scares well is is basically at the right time in the right place. I think that that's that's, you know, I mean, we re tended entrepreneur Toby Paraben. Sometimes I think I made it but open you just starting away, you know, and and I think that that waits for me now. I actually think I see a huge in this consumer behavior and it's a bigger shift. Then then all the millennials one. You're more social. It's a it's actually a fundamental shift. People just people. There's a whole new generation people. I don't know if you if you notice this, but there's a whole new generation of people that can test different in how they think about the world, that they're better informed than their parents and more concerned about stuff they don't want the Rolex it on the car on the bank account. They don't an apartment in a nice part of town. They want more authenticity in their life. They are super suspicious, off launch corporate. They're super suspicious of governments. They're really concerned about their privacy. There's all these factors that come together into this whole generation, which just makes them different economic creature. And I love a scene. I love it, and my whole season as a defender is based on this generation, which is my favorite duration ever, right? They just any fuse, do business with you if you're if you're obviously unethical company and people tend to think people that the thing that that's just a niche, consumer said. And I think that it has been initial summer center in the last 10 15 years. People who just wanted told Johnny things and killed about local supply chains and free trade, but now you go to Tesco, and they have an organic even in the private label. They have an organic line that you tell you it becomes became mainstream. And this consumers now first of consumers and they they vote with their walk and then then companies that companies that are more purpose minded, we're having a bunch. But then they would become investing, and they will invest in companies that already the pressure. If you talk to anyone in the financial industry, the pressure from investors to build sustainable investment product cute and there's just no, not beautiful. This is not enough. That's like the biggest arbitrage opportunity, I think, in the financial markets right now. And it's why you see companies like black rope coming out and declaring that all their old, you know, that they put sustainability at the core off their investment because they're looking. They're looking ahead of a new generation that just will not give them their money. They just won't hand over there one and that's how you scare you just start that way and I think that weird and I've seen even ever, even since I started teaching proof of impact in a few years ago versus now, Years ago, I used to walk into the sea shops, and they just they would just didn't even know how to talk to you know what I mean? Cause this is what is this guy talking? And now you go there and they just know because they steal the pressure in their own portfolio company. They feel the pressure from their own clients from the shareholder. And then the last step will be the regulatory framework. Brittain. And it's changing what you see in Europe, you have the new being deal for Europe. Educate a lot of pressure on corporate. You have governmental initiatives that were disporting corporate between after Iraq, and that's the surface for right. And then all you need to do is to make sure that the market fit that you respond to that thing and just, you know, go to scale. And actually, the technology with the capital that we have available allows you to scare. But, you know, I don't think you can I don't think you can scale without that cargo ship.

Asim: Yeah, and I agree. I think that I've noticed, especially in the last definite little definitely in the last year. Um that there has been a groundswell of movement, and I won't say it's being led by particular people. I think this particular give people have been there at the right time and their figureheads for that for a natural groundswell off change that's happening in and my whole role exists because of that, because there's a belief that there is a groundswell of moving there. So what? Well, what your plans, what we What will you be doing the next coming at kind of 18 months? What's the next 18 months hold for? Proof of impact.

Iulien: So I mean, we we obviously, if you would have asked me this question two weeks ago, I would have had a slightly different answer. Now all better off. I am with, you know, with Corona. I actually think that I'm one of those people who thinks that whatever waits for us on the other side off Carona will be fundamentally different from what we have not, you know, on my business will be affected by that in one way or another. You know everybody's business. Every everything will be affected by that, I think you know. But all things considered I mean, we our our our next job sister scare to get more and toe make sure that we keep our elephants toe the mark. So within the classic, within the classic kind of market stage, we have the product. We have a bunch of clients. How can we be relevant? Our current clients help can be relevant to a whole new generation appliance. What can we do to upset and, you know, because we're an impact mining company, how can we make sure that we're our impact is relevant? The market life? Um, that's what we are. And you know, I mean, be honest me. Over the last week, everyone in our company has shifted their focus to Corona, right? And our big question of the company's. What can we do? Because we're a global company, people mentioned all over the world. Let's go into our community and find something we can do to support because, you know, in times like this, you have tow support your community. So actually, we re purposed a lot of our resources. They were meant for growth and for for for for for for getting to market, really purpose them to the corona response. So we're helping helping people in in in Colorado and in San Diego and in Los Angeles distribute food nurses. And we're happy. And we just way just want to make sure that the apart or

Asim: that's fantastic. Yes, we actually according the 20th of March 2020 on for the future Listeners Russian the at saying in the grips off the Corona virus pandemic and maybe New Year's time. When you're listening to this, it will be quite history. History point. But yeah, so you're actually a people who were working, approve, impacted, just helping out. Yeah, that's fantastic. But I think I also stays a lot about the the ethics of the company and its leaders. If that's Thea, that's the direction you're going in. So, um, let's talk a little bit. You don't mind about what kind of inspired you your background and kind of a co founders past? Well, what inspired you to start this in endeavor off? Proof of impacts. Where'd that come from? So

Iulien: my my background actually very interesting. I've I've spent most of the 2000 basically in conflict in refugee camps. Either I've started working as a human rights lawyer and I worked a lot with just just, you know, rest reviews with the internally displaced people. So I've been in some of the more interesting places. I think in those days, and I've actually had a privilege to be to be to be there where some historic moment had happened. Like bean bean. There were when new countries have declared independence like any steam, or I was there with the peacekeeping operations in the city more and I was I was, you know, a border off Afghanistan when the war started working with Afghan refugees. And I've been in Syria and I So I've done a lot off that sort of working. I spent two years in Somalia. I leave there, I worked there. I've done a lot of that work and actually, you know. So I had the privilege to see the world from a bit of a different perspective. And it's a perspective that if you look with the right kind of eyes, um, it's a place where technology is really a multiply. You know, like, if you're thinking about security in the hands off longer inner city professional, it's a it's obviously the fact that right, But if you think about the current in the hands off someone in a rural Somalia. It's a force multiply. It's something that changes their life complete. And Maxxim, I've seen people using technology in ways that is so smart that I was like, Wow, this is you know, I mean, if we if we find a way to this, I just use this technology, give it in the hands of people that, you know, that that can change everything. So I became the camera reluctant technology, and I'm not like an engineer or anything, but I just became a reluctant take over the year and then I I've you know, I mean, obviously, conflict post conflict life doesn't go well with family life, you know, And I've become a family man, and then I just shift more more operational of development work. So I ground some I'm really large project run country operations for large nonprofits across a number off sectors. I mean, working in logistics, in malaria, in public health, and I've run mobile clinics, large set of projects, lady toe consumer goods. So so again, I've been in markets where infrastructures law, um, income super law, cache of elevated super low, and I've noticed that there are actually, if you, if you work with the insides on the market, can be super successful again. I've had the privilege to be at the center of some initiatives in those markets that were successful, but both in terms of their commercial nature, but also in terms of their evil. And then I'd become a social dependent. I've taken a lot of these insights. I've taken my experience in these markets, and I started the few companies over the years. Some of them have not done very well. Um and others and pulling back doing just It's just a later situation in my in my stuff drive to find ways to make impact profitable and Michael founders actually super interesting where she she comes from a very different perspective. She comes from banking, banking, world financial. She knows she knows the financial markets with Capital world. Very, very well.

Asim: What's the names? You would remind me

Iulien: her name. He lives in Cape Town. We met in Cape Town. I was also living there. Um and we decided to embark on this on this together. I think that her capito kind of investment mind and my impact perspective are pretty powerful combination that would come. And it's a very rare thing to have to have impact finances and technology under the same roof, you know? So that gives us a big advantage.

Asim: So you've had Ah, really interesting background is being think spending the last 20 years or so in conflict and impact zones must have been kind of hard at times. How do you how? Just a motivated How do you have to keep me? Yeah,

Iulien: honestly. Ascent. You know, I mean, any jobs hard, right? I mean, it has its hard time, but I like it. I mean, you know, the impact to the impact to be s ratio in an abandoned like that is more optimal, You know, if you know what I mean. Like like, if you're impact minded And if you're operational Mountain Miley, in those environments, we can have a lot of jobs because you can actually get things done. You can actually see the impact of war with more real. It's more, you know, compared to sitting in office and bring excel sheets and sitting in meetings. I mean, I don't know, we trans hard that and which are more tedious beyond I never I've never done that. So I don't know much about doing exceptions and these meetings that. But any job is hard, and I think that I think that operate in that environment has some advantages that for me and very

Asim: that's a great point, actually, Yeah. So you because you get to see the impact of your work in a very visceral, riel way, which must give you, um, but the motivation to try and do the next imparted trying to the next impact, which is get

Iulien: the inside. You get in any bombing, By the way, most of the world lives in most of the world. Doesn't live in cities in the western, you know, Like he says. That's the reality of our planet. About what? So you might as well know Get to understand how we work, you know?

Asim: Yeah. Good point. Yeah. Do you think you leave the world better than the one you were born into? Or worse?

Iulien: I mean, I have super hard question. I just me, I wish I hope I leave the world better. But I think you know, I mean, that implies that my own actions have have a global impact, that scale, and that's a wonderful thing to imagine. But maybe to beat arrogant, to think, you know, I hope that, yeah, I hope that's the case. But if that's the case, it's not because something I had done, but because I've just been part of the way off a generation that just gets things right, you know, and that I actually believe that's the case. I believe that my the world after me will be a lot better than it is now because of people that I count myself among who actually kept

Asim: Yeah, fantastic, Excellent. Just a couple of questions. Do you have Ah, difficult book or video or the recommendation or something for our listeners that inspired you recently?

Iulien: I do have a piece of comes. I want to recommend to the listener

Asim: prefer,

Iulien: and it's Ah, it's an article written in 1995. I actually share. If I think over the last two years, two years, this is probably the article have shared more. It's written, it's written. It's called Why the Web won't Be Nirvana, and it's written by someone. It's written by someone waas like a technology inside a plea foot storm ethic are leading it. He gets everything wrong. Three. Ford gets everything wrong, and that's why I said is that it's because he sees this guy sits in 1995 he was parked off the inner group that got to understand and build the wet, really wet right. He was a national computer expert. He was famous actually, because he was wanted that that managed to successfully find the first hacker ever he's got. And then he, you know, someone asking in 1995 at Newsweek. What do you think about anything? And these dude gets everything wrong. They're never gonna

Asim: work on, he

Iulien: says. He says it's just a few people using it and he says it's too expensive And he says, People say that we're going to read books from the from some machine who's gonna go with their computer to the beach? He says the toilet and he What's amazing? You know, that isn't Why should his activities people from the inside get get things wrong all the time and and being too smart, he sometimes not so healthy in many ways, you know, and and have to try to you know, you have to look at what I learned from this article and being exposed to this type of people. Getting things wrong is that, first of all, it's impossible to know what happened. But he also shouldn't focus too much on a technology or on a product. But again focus on the bigger train. So, you know in 1995 when this guy will these articles Amazon stop selling books on the same year. What did this guy do? He looked at Amazon's look at Amazon's distribution numbers and said they only sold 2000 books last month. That's nothing, he said, you know, and he compared basically present data instead of looking at the potential for broke right and says, Well, my local shopping mall, he says, My local show me Mark says more things in an afternoon than whole Obama's on in like a month to the local shopping. More cannot grow any father, whereas Amazon has infinite place to grow. So I love this article and I actually I I from the recommended reading and that something like that to the listeners treated on How do not think about the future?

Asim: Brilliant. I love it. I never had a recommendation. Pretty. Somebody got it wrong. Best fantastic. Yeah, Like most. You'll be absolutely fantastic. Fascinating talking tube and hearing. What about proof of impact? Onda and your background especially. Thank you very much. Free time, Julian.

Iulien: Thank you.

Asim: You You've been listening Teoh asking, saying on the climate fix. If you like what you heard, please Hit. Subscribe on your favorite podcast application. It really does help information about this episode, including all the links that we mentioned can be found on our website climate fixed dot com. If you want to message me, you can find me on Twitter as draw eight. Or you can email me at hello at the climate fixed dot com. If you want each new episode neatly packaged together with the show notes and sent inbox weekly, then subscribe to our newsletter, which you can again find on the climate fix Doctor call till next time